manufactured and value

[Chad]

Hi all, im in the process of buying a Durango Manufactured Home and had a question.I;ve heard that manufactured homes decrease in value over time(like a car) but i was told by the salesperson that in some cases its true,however if the manufactured home is set on a permanent foundation and it is placed on a owned piece of property then it will appreciated over time.The only time it depreciates is if its not on a foundation and if its put on a rented or park lot.


also,does anyone know about the durability of a durango home??


thank you all

[chad]

had another question,are these good features??

Solid 3/4" floor decking
fiberglass tubs and showers
fiberglass shingled roof
100amp interior electrical service
R-11 exterior wall insulation
minimum R=25 roof insulation
what does R-11 & R-25 mean?

thanks

[LJ]

I assume you are talking about the Cavco "Durango" homes made at the Durango plant in AZ. They are an above average home, esp compared to the "Litchfield" series made at the Litchfield plant. Relative to appreciation, if your salesman is honest, he will tell you that most mobile homes depreciate somewhat -- or at best maintain their orig value-- to prove that just take a look at some of the older pre-owned homes advertised on this website. Of course, there are some exceptions to this depreciation, with Calif perhaps being the best known -- i.e. location, location, location. When it comes to mobile homes, land values and the improvements you make to the land are more often a bigger factor in appreciation than the mobile home is itself. Unfortunately, the stigma of "trailers" still exists, and generally you will face financing and resale disadvantages when you try to resell your home. But to be fair, mobile homes do provide an avenue for getting into a larger home for less money, and many of them are very well built, often as good as, if not better than a stick built home. Maintain the home well, and you should do OK.

The downside to Cavco homes is that I have been told that you can no longer order plywood floors. The glorified particle board --"duradeck"-- which they offer will probably be ok as long as you don't have humidity problems or a big leak, in which case you may experience swelling and warping. Also although 100 amp service is standard, 200 amp service is better and the insulation factors you cited are rather weak; I would recommend upgrading to heavier insulation (R19 walls and R32+ roofs) and 6 inch walls. Also suggest you be sure to ask for 12" as opposed to the 6" overhangs.

You might want to perform a search on this website about various manufacturers, amenities, and issues. There is a wealth of info here. Good luck.

[rmurray]

Actually you are wrong about the appreciation..depreciation question....There are very few homes listed on this site that include the land...

Consumers Union..the organization that publishes Consumer Reports Magazine...has done an extensive study on just this question..It studied the actual resale prices of thousands of homes..and compared them with stick built in the same area...

Concluesion...Manufactured homes with land in almost all cases APPRECIATE the same as any other type of home on the same property......You can find the whole study..data and conclusion here..

http://www.consumersunion.org/pdf/mh/Appreciation.pdf

[LJ]

Rmurray says: "Manufactured homes with land in almost all cases APPRECIATE the same as any other type of home on the same property"

As I mentioned, there is a wealth of good information on this website. Rmurray is a very knowledgeable, a many times contributor, and I have learned a great deal from his posts since I became interested in buying another mobile home. I have a great respect for him and since he is a dealer / salesman, there is no doubt he knows ten times as much as I do about mobile homes, yet it is interesting that he and I can read the same report (consumer union report) and come to different conclusions. I do not wish to start a battle, but my conclusion of this rather lengthy and somewhat complex report is that mobile home appreciation is inconsistent and generally less as compared to stick built homes. The report also indicates that appreciation is quite variable and quite dependent upon the area of the U.S, and if you own the land you stand a better chance of realizing appreciation than in a park.

The report states: "The large proportion of manufactured homes in rental parks contributes greatly to the lower appreciation experienced by manufactured home owners as a whole as land ownership is an important driver of appreciation. High variation in the individual appreciation rates of manufactured homes also causes a higher proportion of manufactured homes, even packaged with land, to lose value over time."

But in truth, this report is sort of like the recent Congress 9-11 report -- there is something there to also support rmurray's point: "Our data shows that the average appreciation rate of manufactured homes on owner owned land is not consistently statistically different than the appreciation rate of site built homes." But the report goes on: "Yet in three of four of the data series we analyzed, manufactured homes on owned land appreciated less than the site built homes. All the data we examined leads us to conclude that manufactured homes had a much wider range of appreciation than site built homes. This difference is significant, and leads to greater risk for the purchaser. For example, in our analysis of Bexar county, where manufactured homes and site built homes had a similar average appreciation, 13.9% of manufactured homes lost value compared to only 5.7% of site built homes." So you can sort of support any position you want out of this report.

From my own perspective, and experience as a result of having a career in the military, I have lived in about a dozen different areas of the U.S., have owned a number of both mobile homes and stick builts, have rented out both, and have lost and made money on both. My mobile homes have rarely appreciated while my stick builts almost always did.

The mobile home appreciation -- depreciation argument will go on for a long time to come. Bottom line for me is that if I were to buy for later resale, then I would buy a stick built. If I wanted the most value / most square footage for my money, then I would buy a quality mobile home. At the present time I own both, one for my primary home, and one for a vacation home, both on my own land. My stick built in Tucson is appreciating at the rate of 10% a year. My mobile home is in a northern Arizona resort area where stick builts are appreciating at about 12% a year, but my mobile home is clearly not appreciating at all—instead it seems to be holding its orig value. I am happy with them both and have no regrets.

[rmurray]

Thank you for the compliment..

You are right the Consumer Union Report is long and detailed...

For example..one of the quotes you mention could be analyzed further..

"Bexar county, where manufactured homes and site built homes had a similar average appreciation, 13.9% of manufactured homes lost value compared to only 5.7% of site built homes." "

1st...manufactured homes and site built homes had a similar average appreciation,

2nd...lost value compared to only 5.7% of site built homes...this proves that not all site built appreciate..as often stated here in these forums....location and condition must be the reason for these losers...

3rd..13.9% of manufactured homes lost value ...WHICH MEANS 86.7% held or increased their value...Far from the statement that I was responding to that said ALL manufactured homes depreciate...Why do manufactured homes have even this larger loss factor...I am afraid the report did not get to that detail...but..my guess would be condition (some of our owners forget they have to maintain a home)...and most important..location...I am not familiar with this county...but many manufactured homes will be in far rural locations..often forced there by zoning..or land prices..or life style choices..often miles down dirt roads..more so than stick built home...

NOW THE MOST IMPORTANT POINT...

4....Since number 1 is true...and number 3 is true...Logic now says the 86.7% of manufactured homes that increased in value...HAD to increase FASTER than their counter parts that were stick built to make up for the additional losers..

If I had to bet...
Consumers Union went into this expecting to prove that manufactured homes were a financial disaster...Even they were surprised by the facts...To their credit they reported this to the public...They could have hidden the results and let conventional wisdom prevail...

Place your home is a good location...take care of it..expect that it is a home and market it like one..and most likely enjoy your returns..

[LJ]

I'm afraid rmurray and I will just have to agree to disagree. I have just had too many experiences to the contrary and know of too many mobile homes on the market in my area right now, where depreciation (on no appreciation) is evident. For example within a few hundred yards of me, there is a triple wide, top of the line, year 2000 Silvercrest (one of the best manufacturers in the west), with corian countertops, ceramic tile, double detached garage, etc on 1.2 acres of land where the owner has just decreased his price from $225K to $195K. This may sound like a lot to some of you, but this is in a premier area where unimproved 1/2 acre lots now go for over $100K, and the owner has over $225K invested. There is a stick built about the same size next to it that is listed for $325K. I doubt that the triple wide will go for more than $175K, and if it is reduced again, my wife and I plan to make an offer of $160K. This is not an isolated incident; I know of a lot of other MH's in my area where appreciation is non existent (and in fact, this gives would-be buyers some great opportunities to get a great deal).
Nevertheless, I find rmurray's posts to often be the best and most informative on this website. Like E.F. Hutton, when rmurray speaks, I listen!! Again I thank him for all of his posts!

[chad]

WOW GUYS,thanks for the lengthy replies!!!
LJ,i too live in tucson,small world ehh??
will R-11 exterior wall insulation R=25 roof insulation be ok for the tucson weather, IE:monsoons and dry heats and of course those winter snow storms!!!LOL

what do you recommend i do to keep my house in tip top shape for years to come??

[Annaz]

I live in Tucson too. I think it all depends on the US area in reference to appreciation and I have to agree with LJ. I agree w/LJ on rmurray's knowledge as well, but we have to agree to disagree as well on the appreciation. Friends of theirs (and this is quite the norm) have a house they spend $115,000 and 3 years later sold it for $140,000...and enough back yard to have a patio...that's it...in a blue collar area. No fixing, no upgrades...nothing changed since they moved in. Nothing in that house to make it appreciate at such a fast rate. No way would a manuf home do that here.

I talked to appraisers and sold several manuf homes...all top of the line and while they appreciated somewhat, they didn't appreciate even close to what a site-built appreciated to. But I will say, that the land the homes sat on did the appreciation in addition to added structures, such as garages, etc. There are many homes for sale on land here...but the top of the line are better resalers, since there are soooooo many lower end homes for sale. They're a dime a dozen which makes them hard to sell.

Since most of the air we use in Tucson, is a/c, I wouldn't use less than an R40 in the roof...most of the heat/ac loss is through the roof. We have a 2500 sq ft house and have not had more than a $220 a/c bill...We keep it at 79 during the day and 65 at night! A big savings for a little cost of an upgrade, however, we have R50 in our roof, R22 walls and R19 floors.

As long as your backfilling on your home is done correctly, the dirt under your home (if not ground set) will be dry as a bone. I also recommend the Hardie Panel siding....woodpecker proof and no termites, two biggies here.

Our next house is a Durango as well. We were going to get a Silvercrest, but they were over $70/sq foot. LJ...go for it if it gets to that price! I wonder if it's the one for sale in Benson????

[LJ]

Annaz--The Silvercrest is in Pinetop Country Club in the White Mountains. Nice unit.

Chad--Annaz is right. Pay the extra to get the heavier insulation package and six inch walls. It will easily repay itself in the long run. You might also look at the Palm Harbors made in Tempe, not Casa Grande. They are popular out here; they seem to be pretty high quality and you can still get plywood floors. Good luck!